This article explains the framework for selecting strategies at Gro, and sets out the safety checks that are in place.
Strategy selection framework was updated. The following article is outdated. Please refer to Gro docs instead for the latest strategy whitelisting & prioritisation framework.
Summary
Active Gro strategies are always communicated to users on the app dashboard, so you can see current protocol and stablecoin exposures at any time. This article reviews current and recent allocations as at the time of publishing.
Gro DAO will source and implement strategies from DAO members (not the core team) and there will be a governance process in place for this. The core team welcomes feedback as always on the selection criteria.
Strategy selection framework
Green = current exposure; Yellow = recent historic exposure.
Protocols
Stablecoins
Presenting a rounded view of risk
Risk in DeFi can be hard to measure quantitatively and objectively, however we feel the selection of criteria above gives a rounded view.
Across this framework we cover:
- Length of time a protocol is live on mainnet: the longer a protocol has been around the more time for its code to be examined by hackers
- Audits: more audits decrease the likelihood of flaws in smart contract code
- Bug bounty: a higher bug bounty incentivises more ‘white hat’ hackers to have reviewed code
- DeFi safety score provides a third party and quantifiable way to measure risk and security with a rigorous quality audit process
- Protocol TVL: higher protocol TVL increases the potential gain for hackers, and therefore incentivises more code examination
Stablecoins also cover:
- Collateral type: this explains how a stablecoin keeps to peg, whether backed by fiat or crypto assets, and whether overcollateralised or fractionally backed
- Stablecoin market cap: this is a measure of the market’s view of safety (as higher market cap implies more participants trust the coin) and available liquidity
- Curve 3CRV (meta)pool depth: high pool depth shows further market confidence, and also deeper liquidity implies lower volatility
- Daily Volatility and Max 1 day volatility past 6 months is a measure of deviation from peg based on daily trading prices over the past 6 months which indicates price stability for an asset
Strategy reference table
The type of strategy that is used for each protocol and stablecoin does not impact exposure levels, however it can be a useful piece of information in assessing risk of strategies.
Set out below are the descriptions of the seven current strategies, together with contract addresses and exposure details.
Sources
All data is taken from a selection of sources as at 30 November 2021, including protocol sites, docs and other web sources. Specific sources are as follows:
- DeFi safety score is from https://www.defisafety.com/
- Protocol TVL is from https://defillama.com/
- Stablecoin market cap and Volatility (Max and daily) is from https://www.coingecko.com/en
- 3CRV pool depths are from https://curve.fi/
